Redundancies, Retention and RestructuresPosted on 15th March 2023
The UK, like the rest of the world, is bearing the brunt of economic unrest, and we’re seeing this manifest in the marketplace with a rolling recession that has many of us unsettled, to say the least. So, what options do we have when it comes to redundancies, retaining our talent and restructuring the workplace place to ensure productivity and engagement during such challenging times?
What’s happening with recruitment, retention and restructures?
The marketplace is a little mixed right now. Inflation is putting pressure on us all: the cost of living is forcing a demand in wage rises; employers are certainly feeling the effects of a rise in employee activism, as noticeable shifts in employer/ employee dynamics become apparent. There’s a definite air of discontent right now, and rising business costs are creating further tension when it comes to attracting and retaining key talent too.
Organisations are now seeking to reduce their costs and reallocate resources, with many employers pulling back on previously ambitious hiring projects. This is particularly evident in the tech sector, with some organisations starting to announce proposed redundancies- and others following suit.
But despite the evident economic turmoil, the unemployment rates in many jurisdictions continue to stay low; the UK jobs market remains resilient, and the market for key talent is still very competitive. Now, employers need to carefully balance recruitment and retention with the very real need to make costs savings.
Recent research from Coupa Software (NASDAQ: COUP), a leader in Business Spend Management (BSM) revealed that 96% of UK businesses are struggling to maintain a competitive edge- and 27% admit they’re prepared to reduce their workforce if a recession should hit in the next 6-12 months. But why are organisations struggling, if the jobs market is relatively strong, given the circumstances?
- 37% say that the increase in energy prices is the main cause of concern.
- 50% say they’re most concerned about meeting payroll during such uncertain times.
However, despite the possibility of layoffs, data does suggest that businesses are grappling with managing their costs whilst retaining employees.
- 36% are concerned about retaining employees during such uncertain times.
At the moment, 72% of UK finance leaders say the impact of a recession on their company’s financial performance is their number one concern, with Coupa’s research suggesting that many are exploring ways in which they can boost profitability and prevent layoffs too. It seems the top three strategies to achieve this are:
1. Digitisation- streamlining processes which can help to cut costs.
2. Increasing productivity- ensuring employees are supported at work and protecting wellbeing.
3. Increasing efficiency- again, streamlining, and eliminating unnecessary and costly processes that don’t serve the business.
According to the UK Labour Market Statistics report, we’re continuing to see a fall in earnings and vacancies; this is along with an increase in redundancies by 30,000, reaching 97,000, as reported by The Office for National Statistics.
Although the unemployment rate was still low between September and November 2022 at 3.7%, the levels are rising. This is evident when you look at companies such as Ford, who are set to cut one in five UK jobs over the next two years, announcing thousands of redundancies as part of its restructuring programme. It’s expected to make 1,300 UK employees redundant, with the majority being in development and back-office roles.
How can businesses retain talent?
So how can your businesses retain key talent when times are this tough? What are the strategies you can implement to protect your team and keep your company running smoothly through troubled waters?
- Communication is key. Yes, it might be tempting to remain tight-lipped on the challenges that recession may bring, but your team know what’s going on. The challenges are everywhere and keeping them in the dark will do them- and you- no favours.
- Be open and honest. Your employees will appreciate the effort you put into keeping them up to date on what’s happening, so don’t be afraid to host regular meetings to update everyone on performance and to lay out how you plan to tackle the upcoming challenges. Set up surveys for feedback, always keep the lines of communication open and ask employees for their input- keep them involved.
- Make an effort to boost morale wherever you can. Yes, keeping your business afloat is your number one priority, but it’s all too easy to lose sight of the bigger picture when times are tough. You cannot forget that your staff are experiencing this too. They’re also struggling against rising costs right now- from food to energy bills- and all of this can take a real toll on mental health and well-being. Keeping morale up is vital now, more than ever.
- Show your appreciation to employees. If you can, offer an Employee Assistance Programme (EAP) so that staff have 24-hour access to confidential support from trained counsellors, equipped to help them deal with a wide range of issues, from relationships to financial worries. Perhaps you could also offer additional days off or more flexible working hours to help support employees too. All these small gestures can go a long way in showing support, respect and gratitude- and will help to demonstrate that you acknowledge the importance of a good work/ life balance too.
- Invest in training. Helping employees to build their skills and to develop professionally shows that you’re investing in them. It will also ensure that they’re skilled and have the necessary training to transfer skills during a recession should the need arise- always a preferred option over redundancy.
- Monitor your processes and review them regularly. What can you eliminate instead of your team? Can you outsource costs anywhere? Can you cut costs on any service or process that doesn’t add value? Work to keep your office bills as low as you can: perhaps the team can work from home to reduce costs, or maybe you can streamline more processes to bring costs down. Now is the time to renew it all and see where changes can be made that will allow you to keep redundancies off the table.
For the times when retention isn’t possible.
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